Garment exporters are fed up with being harassed by VAT and customs officials, who have been imposing abnormal fines alleging a lack of documents, said an exporter yesterday.
The VAT and customs officials are imposing fines up to 400 percent, said Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
He added that in places like Sanarpar and Rupganj upzila in Narayanganj, officials are levying fines of Tk 2 lakh to Tk 5 lakh due to an alleged lack of documents.
He further said that officials often detain goods-laden trucks and it takes a few days to release them. But by then it is too late to take the goods to the factories.
As a result, exporters either face a cancellation of work orders or send goods through air, which is very expensive.
Hatem was speaking at a pre-budget discussion on “highlighting income tax, VAT, customs duty, sector-wise allocation of budget, external debt, etc” organised by the Institute of Chartered Accountants of Bangladesh (ICAB) in collaboration with the Economic Reporters’ Forum (ERF).
Former ICAB President Md Humayun Kabir moderated the discussion, featuring economists, businessmen, accountants, and journalists.
Ashikur Rahman, senior economist at the Policy Research Institute (PRI), highlighted the need to address inflation, the foreign currency reserve situation, the deficit in development allocation, and the problematic banking sector while preparing the next budget.
He also suggested merging a number of ministries.
PRI Executive Director Ahsan H Mansur reminded to keep internal and external economic shocks in mind while preparing the next budget.
The government should also aim to ensure macroeconomic stability by reducing inflation, Mansur added.
He suggested imposing more tax on land as many are not cultivating their land, which is unproductive.
Mansur said if customs duty, supplementary duty, and customs procedures are not reformed, Bangladesh will face difficulties signing Free Trade Agreements (FTAs) with other countries. Other nations will not show interest because of high duties, he said.
Md Saiful Islam, former president of the Metropolitan Chamber of Commerce and Industry, suggested tightening the belt by not approving unnecessary projects in the next budget.
Abdul Haque, former president of Japan Bangladesh Chamber of Commerce and Industry, stressed the need to provide more facilities for cottage, micro, small and medium enterprises so they can develop and contribute more to the economy.
ICAB President Mohammad Forkan Uddin said VAT and taxes are often exempted to control the market when prices of specific goods increase in the local market. As a result, the government loses revenue. Instead of doing this, they should go for market management, he said.
Former State Minister for Planning Shamsul Alam said no major reforms to the National Board of Revenue and Internal Resources Division have been made so far, due to which complaints of harassment persist.
The tax-GDP ratio in Bangladesh is still lower than its South Asian peers like Nepal, Pakistan, India, and Sri Lanka, he said.
